Show transcribed image text cost of the following investment: P=70,000, N= 7 years. S#50,000. CCA rate = 20%, tax rate-45% and MARR= 16%. (Assume the asset is sold immediately after the end of the seventh year and that the asset class terminates at that point) (42,070) A company is considering a short-term gravel pit project. It would cost $250,000 to acquire the land required for the gravel pit and the equipment necessary for the project would cost $400,000. In order to finance the project, the company plans to use $350,000 of its own money and borrow $300,000 from a bank. The company has arranged to pay back interest at 12% per year at the end ofeach year and to pay back the principal at the end of two years After the end of two years, the company believes it will be able to sell the land for $325,000 In addition, the equipment (which is Class 10-30% CCA rate) will have a salvage value of $200,000 after the end of two years. The asset class will terminate upon the sale of the equipment. Over the two year period, the gravel pit operation is expected to generate $500,000 in annual revenues and operating costs are anticipated to equal $150,000 per year Calculate the present worth of the project if the MARR is 15% and the tax rate is 40% (178,276) 2. The following data is for questions 3 and 4. All values are in thousands of dollars The equipment is Class 10 (30% CCA rate) and the asset class continues in all situations. Assume a tax rate of 40% and a MARR of 15% and that assets are added to the class in the year of disposal ar Defender Operating & Maintenance Costs 10 16 Market Value 109 620 3. Determine the economic service life of the defender (2 years AE-10,169)